{"items": [{"author": "Ross", "source_link": "https://www.facebook.com/notes/jeff-kaufman/leaving-bbn-joining-adverplex-risk-neutral-giving/464769656212/?comment_id=464989406212", "anchor": "fb-464989406212", "service": "fb", "text": "Please excuse my unnecessarily academic discussion of charity.
Charitable giving is cyclical. People give more when the economy is good. But charities need more when it is bad.
To the extent that your firms stock performance is correlated with the overall market, risk does matter. If you will be giving in the case that everyone else is giving that would not be as valuable per dollar as say your generous gifts over the past two years when aggregate giving has been down.", "timestamp": "1291821744"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/leaving-bbn-joining-adverplex-risk-neutral-giving/464769656212/?comment_id=465007046212", "anchor": "fb-465007046212", "service": "fb", "text": "@Ross:
Your argument about cyclicity would suggest that I should save my money during economic good times (when other people are giving) and give it to charities when aggregate giving goes down. In the current charity market, this may be right, but it's kind of dumb. The right way for the charity market to work is that donors should give what we can, when we can, and charities should save money so that if donations fall for a period the charity doesn't have to inefficiently pull back operations. Unfortunately, many donors view money given to charities as wasted if the charities hold on to it instead of spending it quickly (within a year or so) on programs. Until we can change what charities think it's ok for them to do with money, though, I think \"anticyclic\" giving might make sense. I need to think more. It relates to the problem I've not yet figured out of what discount rate to apply to future charitable giving (http://www.facebook.com/note.php?note_id=421515706212).
As for my company's stock performance being correlated with the overall market, I think that's a separate question. I can still give stock-option money anticyclicly by holding onto it a little longer.", "timestamp": "1291824789"}, {"author": "Julia", "source_link": "https://www.facebook.com/notes/jeff-kaufman/leaving-bbn-joining-adverplex-risk-neutral-giving/464769656212/?comment_id=465120291212", "anchor": "fb-465120291212", "service": "fb", "text": "Don't worry, Jeff is all over \"unnecessarily academic.\"
Charities don't want to have to cut programs if the economy dips, so they do their best not to spend in cycles. The donations coming in cycles isn't a problem - that's the whole point of capital campaigns. In good times charities spend less than they can, and in bad times they spend the reserves. To a well-run charity, the timing shouldn't matter a whole lot.", "timestamp": "1291840754"}, {"author": "Ross", "source_link": "https://www.facebook.com/notes/jeff-kaufman/leaving-bbn-joining-adverplex-risk-neutral-giving/464769656212/?comment_id=465127866212", "anchor": "fb-465127866212", "service": "fb", "text": "yeah, i could tell.
But lets say, for simplicity, that there are two possible future outcomes. In one your company's stock is worth a lot, in the other it is worth nothing. If the odds of these states occurring are related to the overall market, then lets say in the state where the stock is worth a lot, the economy is also doing well. in the other it is not.
Were that true, then you would be able to give a lot in the situation that everyone else was able to give as well, and you would be unable to give when everyone else is also unable.
If you compare this to the alternative of giving a flat rate all the time now matter what, it suggests that which option is better depends on how much more valued donations are when everything goes poorly.
However, this is an overly simplistic model.", "timestamp": "1291841865"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/notes/jeff-kaufman/leaving-bbn-joining-adverplex-risk-neutral-giving/464769656212/?comment_id=465759911212", "anchor": "fb-465759911212", "service": "fb", "text": "@Ross: I'm not sure that the value of giving at the same time as a lot of other people is actually that low. There's so much more that needs doing than money to do with.", "timestamp": "1291954251"}]}